News Round up: July 2012

Jane Wallenstein looks at some of the big employment stories of July 2012, including the announced decision to charge fees in the Employment Tribunal and Employment Appeal Tribunal; the most recent statistics in employment litigation; an update on the position regarding maternity leave and surrogacy and, finally, a recent case which has further clarified the difference between the definitions of worker and employee.

Fees in the Employment Tribunal

Following on from their ‘Charging Fees in Employment Tribunals and the Employment Appeal Tribunal consultation’, the government has now published their response and confirmed that, as of summer 2013, fees will be charged in Employment Tribunals and the Employment Appeal Tribunal.

There will be two fees payable by claimants; an initial “issue fee” when they lodge a claim and a “hearing fee” prior to a listed hearing.  These will be based on the type of claim; with level 1 indicating the more straightforward claims and the remainder being allocated to level 2.

Therefore the fees will be as follows:   

Level 1:   

• Issue fee: £160 
• Hearing fee: £230

Level 2

• Issue fee: £250
• Hearing fee: £950

These figures will vary in the event there are multiple claims.

In addition, there will also be fees for specific types of application, namely:

• An application to set aside a default judgment: £100, payable by the respondent
• An application to dismiss a claim following the claim's settlement or withdrawal: £60
• An application for judicial mediation: £600, payable by the respondent
• A breach of contract counter-claim: £160, payable by the respondent
• An application for a review of a tribunal's decision or judgment: £100 for Level 1 claims and £350 for Level 2 claims, payable by the party making the application

A remission system will be established (as used in the civil courts) which will excuse those on low incomes from having to pay the fees.  This has been included so as to protect access to justice for claimants who cannot afford to pay any or part of the fees.  In essence, the system will permit claimants to provide proof of their financial eligibility for either a full or partial remission, based on their receipt of certain benefits, or their (and their partner's) gross annual income, or their (and their partner's) monthly disposable income.   Interestingly, the current system does not take into account savings or redundancy payments, albeit there is some discussion about reviewing this.

In addition, tribunals will be given a discretionary power to order the losing party to pay any costs of the successful party incurred by way of fees.

Employment Tribunal Statistics

The annual ET statistics were published at the end of last month.

Some of the key statistics include:

• A further decrease in the total number of claims; from 236,000 in 2009/10, to 218,000 in 2010/11 and 186,000 in 2011/12
• 10% fewer claims were disposed during 2011/2012
• Unfair dismissal claims have fallen slightly from 47,900 to 46,300
• An average of 1.73 jurisdictional complaints per tribunal claim, indicating that a large number of claims contain multiple grounds, i.e. unfair dismissal and discrimination

Maternity leave in surrogacy situation

As some of you may recall, we touched on the issue of maternity leave for mothers of children born by surrogates earlier this year and how the tribunal had referred to the ECJ, the question of whether a mother expecting a baby through surrogacy is entitled to maternity leave and various benefits including paid leave (in C-D v S-T). 
 
By way of an update, it has been recently announced by the government that it is considering the possibility of granting leave and pay for mothers of children born by surrogates in statute. BIS is looking into this and, in addition, it is the subject of a Private Member's bill, Surrogate Parents (Leave, Pay and Allowance Arrangements) Bill 2010-12.

Although little more than this is known at this stage, it does look promising that there may be a change in this area of law so as to ensure greater clarity and fairness for all mothers; we shall, of course, keep you posted on the outcomes of the above, when these are known.

Who is a Worker?

The recent Court of Appeal case of The Hospital Medical Group Ltd v Westwood has helped further clarify what can distinguish an employee from a worker.

Dr Westwood was a GP with his own practice.  He was also engaged by the Hospital Medical Group Ltd (HMG) to carry out hair restoration surgery on a self-employed basis. By way of background, HMG engages surgeons with practices in their own right and none are engaged on contracts of employment. Upon termination of this agreement, Dr Westwood brought claims for unlawful deductions from wages and holiday pay.

The ET held that he was a worker (under section 230(3)(b) of the Employment Rights Act 1996) and based this decision on the fact that he had a contract to perform services personally for Hospital Medical Group Ltd and this organisation was neither his "client or customer".

An appeal was lodged at the EAT (who upheld the ET’s decision) and then the Court of Appeal.

HMG was primarily arguing that the definition of worker in s.230(3)(b) excludes a person who provides services to a 'client or customer' of any profession or business carried on by him.

The Court of Appeal therefore sought to distinguish between;

•  individuals who market their services as an independent person to the world in general (who will have clients or customers)
• individuals who are recruited by the principal to work as an integral part of the principal's operations

Dr Westwood fell into the second category. The Hospital Medical Group Ltd was neither Dr Westwood's "client or customer" and had recruited him to undertake procedures on its behalf.  This was further clarified by the fact that when he worked for them he was clearly referred to as "one of our surgeons". They held that, even though he was in business on his own account, he was clearly an integral part of The Hospital Medical Group Ltd's undertaking and was providing services. On that basis he was, therefore, a worker and was not someone carrying on a business undertaking, who was excluded from the worker status definition.